Category Archives: Charlie Shrem

Bitcoin entrepreneur Charlie Shrem shared his views on the scaling debate, stating that “it’s not about technology anymore, it’s about power.”

Shrem: ‘It’s About Power’

Charlie Shrem, Bitcoin entrepreneur and co-founder of Intellysis, was present in today’s episode of the Double Down show, dubbed “Does Block Size Matter?” with the usual hosts Max Keiser and Stacy Herbert.

During the show, Shrem expressed his thoughts regarding the current state of the scaling debate or as Herbert called it, “the Great Blocksize War of 2017.”

Shrem stated:

In reality, it’s not a technical argument anymore. Everyone on both sides of the table say that SegWit is the best technology that we have.

According to Shrem, the scaling debate is no longer about the most viable technology or solution that can be used to scale Bitcoin. Instead, the scaling debate has become a power struggle between two development teams, Bitcoin Unlimited and Bitcoin Core.

“The other side of the debate, which is Bitcoin Unlimited, they agree that SegWit is a great technology,” he continued. “But to them it’s not about technology anymore, it’s about power.”

Shrem went on to say:

They want to remove [Bitcoin Core’s] ability to work on Bitcoin and instead have a closed-membership small group of four to five developers, who they think are the best for the job, run Bitcoin going forward.

A Test for Bitcoin

However, there is a silver lining in this development, which Shrem considers it as an “extremely bullish situation for Bitcoin.” The current block size “drama” is showcasing Bitcoin’s ability to resist a malicious attack on the network.

He noted:

Here you have a group of bad actors who are trying to overtake the Bitcoin network and essentially fork all of bitcoin and force all Bitcoin users to be able to use their developers and their codebase and their everything and it’s not a group of miners that’s preventing this.

Shrem sees the current hash power signaling as a “glorified poll” when it comes to hard fork given that nodes are the ones that validate blocks and they can discard the ones from the hard-forked chain at will, meaning that miners don’t have nearly as much power as they think they do.

This can be observed the UASF proposal, which would bypass the miners completely and leave it up to the nodes to force SegWit into activation.

However, it may not come down to a UASF, as mining pools like F2Pool are beginning to move to SegWit driven by demand from individual users that contribute hashrate to the pool.

Champagne Problem

Not all is gloomy for Bitcoin, however. Amidst all the tension and drama, one must also look at the bright side, which is the reason we’re having this heated debate at all: Bitcoin is growing at an exponential rate.

This is, as Shrem puts it, a “champagne problem,” one that gives us as much to celebrate as it gives us to fight about.

“It’s a good problem to have. Bitcoin has grown really quickly. We never expected this to happen so quickly, to be honest. We’re getting towards what they call a ‘champagne problem,’ how do you scale?” he said.

This means that not only is Bitcoin working as intended, but there is also an urgent need for such a currency in the world. Now, it’s only a matter of making sure that Bitcoin can become that currency and still maintain its decentralized and immutable characteristics.

Shrem concluded:

There has always been research and conversations on scaling over the past three years but, to be honest, we didn’t think we’d see this exponential growth in Bitcoin and now it’s time to have that conversation.

Do you agree? Is the scaling debate actually about power and control? Share below!

The movie, titled “Banking on Bitcoin” has been released on January 6, 2017, in select theaters across the United States. It’s also available on VOD for those who can’t make it to the theaters.

Banking on Bitcoin, The Movie

Bitcoin is one of the most spoken about financial assets of this year. As the cryptocurrency’ price continues to soar, Gravitas Ventures takes moviegoers to a trip through the cryptocurrency’s timeline with its upcoming feature film.

Banking on Bitcoin is filmed to offer a comprehensive view of Bitcoin’s past as well as the future. The most disruptive technology of this century has been embroiled in an ideological battle between fringe utopists and mainstream capitalism. While Bitcoin has the potential to offer financial liberation to its followers, the mainstream banking and financial institutions and governments are not too happy with it. Banking on Bitcoin offers in-depth coverage of some of the key players in the ecosystem.

Few cryptocurrency heavyweights featured in the film includes the likes of Charlie Shrem, Cameron and Tyler Winklevoss, Barry Silbert, Erik Voorhees, Nathanial Popper, and Alex Winter. It offers an insight into how these personalities think about the revolutionary technology and what they believe lies ahead for it in the future.

Helping Clear Up Misconceptions

Gravitas Venture is one of the leading all rights distributor of independent cinema in the region. The company has working relations with over 500 content partners and it has a long list of movie titles across genres under its belt.

Gravitas Venture and the team behind Banking on Bitcoin are very happy with the outcome of the movie. The movie is expected to offer a better understanding of the cryptocurrency, the principle and ideology behind it, its benefits and more to moviegoers.

The cryptocurrency, since its launch, has been struggling with slow adoption rate due to various misconceptions among the population. The mainstream media hasn’t been helping much either as most of them carry mixed views about the future of money.

Banking on Bitcoin is expected to help clear these misconceptions to an extent and potentially increase the adoption as well.

One year ago today, former BitInstant CEO and early Bitcoin proponent Charlie Shrem began serving his two-year prison sentence. The former CEO of BitInstant, a popular Bitcoin exchange in the early days of Bitcoin, was arrested at JFK airport in January 2014. He was just 24 year old.

$1 Million In Laundered Bitcoins

Later convicted of abetting more than $1 million in bitcoin sales to Silk Road users, and also cited as a Silk Road user himself, Shrem faced a detailed case against him. He was charged alongside Robert Faiella, who was known as BTCKing on the Silk Road.

“Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way,” DEA agent James Hunt stated.

When arrested, Shrem was the Vice Chairman of the Bitcoin Foundation, which proved a big scandal for the beleaguered and rebranding Foundation. BitInstant, backed by the Winklevoss twins, was offline at the time.

Shrem, who worked as both Chief Executive Officer and Compliance Officer, was charged with operating an unlicensed money transmitting business (as was Faiella); failing to file suspicious activity reports, thusly in violation of the Bank Secrecy Act.

“As alleged, Robert Faiella and Charlie Shrem schemed to sell over $1 million in Bitcoins to criminals bent on trafficking narcotics on the dark web drug site, Silk Road.” Manhattan U.S. Attorney Preet Bharara stated. “Truly innovative business models don’t need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act. We will aggressively pursue those who would coopt new forms of currency for illicit purposes.”

IRS Special-Agent-in-Charge Toni Weirauch said: “The government has been successful in swiftly identifying those responsible for the design and operation of the ‘Silk Road’ website, as well as those who helped ‘Silk Road’ customers conduct their illegal transactions by facilitating the conversion of their dollars into Bitcoins. This is yet another example of the New York Organized Crime Drug Enforcement Strike Force’s proficiency in applying financial investigative resources to the fight against illegal drugs.”

The complaint stated that Shrem knew Faiella’s business was on the Silk Road, and knew what the Silk Road was, and had even been a user. Shrem, never shy, often spoke of alcohol and marijuana use: “I won’t hire you unless I drink with you or smoke weed with you—that’s a 100 percent fact,” Shrem once told a reporter for Vocativ.

Charlie Shrem: Bitcoin’s First Felon

The charge of one count of conspiracy to commit money laundering carries a maximum sentence 20 year prison sentence, including the count of operating an unlicensed money transmitting business, a maximum five year prison sentence. Shrem also was charged with the willful failure to file a suspicious activity report, a maximum sentence of five years in prison; overall, he faced thirty years in prison. He received two years, a term he was “content” with and considered a “relatively short sentence.”

“On March 30th, I’ll be self surrendering to Lewisburg Federal Prison Camp in Pennsylvania. It’s been a long hard fight, from getting arrested at JFK airport while landing home, to solitary confinement and being under house arrest the for the past 14 months. When the government indicted me and requested 30 years, I kept my head up with the help of friends, family, and the Bitcoin community. While some distanced themselves, most stood by and fought. I owe my life to those people. Of course I don’t look for sympathy, I did the crime and I will do the time. They say those who stand by you in the bad times, deserve to be with you in the good times. Good times are coming and I look forward to it. I also want to thank those select few in the SDNY District Court and NYSPT for treating me with dignity and respect.”

Its could very well be Shrem is released before his full two years is up, if he’s been on good behavior, which I am sure he has been. Shrem’s arrest came at a time when the War on Drugs is seemingly dwindling. The ambiguity of laundered funds, however, touches a nerve with the American public as it can be associated with terrorism, and likely would make most juries skirmish.

What Shrem plans on doing once he’s out of prison has yet to be seen. The Winklevoss twins, who had invested in BitInstant, publicly separated themselves from Shrem after the arrest. When he comes out, he will be entering into a Bitcoin industry that is much transformed from just one year ago, namely as a result of the entrance of some of the world’s largest financial institutions and technology multinationals into the space.

What do you think about Charlie Shrem’s prison sentence? Let us know in the comments below!